Sacramento, CA— April marks one year since the public was first made aware of the improper vacation buybacks for staff at the Department of Parks and Recreation. As the California Budget Fact Check has previously found, this revelation ultimately led to the disclosure that the Department had hid $54 million in taxpayer dollars from the Department of Finance and the Legislature.
Facing increased scrutiny from the Legislature, the news media and citizens groups, one would expect that state government departments would act with greater accountability in the glare of the public eye.
But last week, the State Auditor found that there are serious questions about the operations of the special license place program, specifically that:
- State officials did not collect $22 million in fees from motorists who have a special plate on their vehicle.
- The state overcharged the license plate program by $2.1 million annually for overhead costs, reducing funding available for the targeted programs.
- The Auditor’s report raises additional questions about spending and accountability at the Department of Parks and Recreation.
DMV Fails to Collect $22 Million
According to the Department of Motor Vehicles, there are eleven special interest license plate programs. Motorists who purchase them pay an additional fee to receive the plate, then an annual renewal fee – on top of regular license fees charged to motorists.
The proceeds from the sale of each specific plate are allocated for specific purposes, such as environmental protection. For example, proceeds from the 9-11 Memorial license plates are to be used to “help California’s law enforcement fight threats of terrorism in the Golden State.”1
After reviewing the administration of the special interest license plate program, the State Auditor’s Office concluded that the Department “does not ensure that it has collected the appropriate amount of fees that are due for the special plates.”2
Specifically, they noted that the Department did not collect $22 million in special license plate fees that they should have collected by law. This included $12 million between 2010-11 and 2011-12 not collected from motorists who had had an inactive license plate for more than four years. They also charged some vehicle owners the wrong amount, undercharging collectively by $10.2 million over a two year period.3
Overcharges for Administrative Costs
The Department of Motor Vehicles is responsible for administering the special interest license program, though it charges the various funds annually for the administrative costs of collecting the fees and producing the plates. The State Auditor’s office found that DMV was inaccurate in the way it determined administrative costs.
Between 2009-10 and 2011-12, DMV overcharged the California Environmental License Plate program by $2.1 million annually for personalized plates, reducing the funding available for environmental programs. At the same time, it failed to recover $1.1 million during that same period due to outdated methods of calculating administrative costs.4
Auditor Uncovers New Questionable Spending By State Parks Department
State agencies and departments are designated to administer funds collected through the special interest license plate program. For example, the Department of Parks and Recreation is tasked with administering the proceeds from the environmental license plates.
In their report, the Auditor uncovered yet another accounting problem at the scandal-plagued department, noting that it “could not support how it determined the amount of the environmental fund money it budgeted for its offices.”5 They also questioned whether the state benefitted from $200,000 in state spending paid for through environmental license plate funds.
Conclusion: More Action Needed to Improve Accountability in State Spending
The Parks scandal and the new State Auditor report highlight a disturbing trend with how state departments document and spend tax dollars.
The Legislature is beginning to take action to address this ongoing problem. Assembly Bill 661, by Assemblywoman Beth Gaines, R-Rocklin, would improve transparency among state agencies and reduce the possibility of future abuses like the State Parks hidden money scandal and the CAL FIRE slush fund. The measure was recently approved by the Assembly Accountability and Administrative Review committee on a bipartisan vote.
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